Defying Gloom and Doom: The $9.5B WA Wine Industry’s Grape Expectations

Bart Fawbush has tackled numerous obstacles in the course of establishing a boutique winery, noted for its distinctive varietals.

The Bartholomew Winery started off in rented spaces in West Seattle and later migrated to Kennewick, becoming one of the pioneering wineries to join the Columbia Gardens wine village near the cable bridge.

Relocating came with its set of difficulties, as did setting roots in a new location that was just starting to catch the eye of wine lovers.

Due to its small scale, Bartholomew is unable to secure a contract with a nationwide beverage distributor, and largely depends on direct customer sales in its tasting room.

Despite the hurdles, Bartholomew Winery remains a profitable venture with an expanding wine club, says Fawbush. Every year, it produces around 3,000 cases and occasionally manufactures small batches for third-party entities.

In light of a global decrease in wine demand, Washington’s wine industry leaders wish to bring attention to such successes.

The industry’s leaders, assembled at the annual WineVit conference in Tri-Cities, asserted the need for a shift in the industry’s communication.

The Washington Winegrowers Association organized WineVit, which was held earlier in February. The event brought together winemakers, growers, vendors, and other related professionals.

Despite discussions concerning an oversupply of global wine, diminishing demand, competition from craft beers and spirits, lack of interest from the younger generation and the growing temperance movement, industry experts suggest that the $9.5 billion wine industry in Washington needs to shift from a negative narrative and celebrate its triumphs as it aims for a more significant portion of a declining market.

“People are not attracted to desperation. This trait doesn’t promote wine sales,” remarked Adam Schulz, the proprietor of the Incredible Bulk Wine Co. based in Walla Walla, during a forum that analyzed the state of the industry.

Indeed, Washington’s Ste. Michelle Wine Estates terminated 40% of its grape contracts in 2023 and ceased production at its 14 Hands Winery located in Prosser.

Currently, there are massive volumes of unsold bulk wine idling in tanks, which affect future output.

Authorities express that Washington should reduce its focus on challenges and instead strive to capture a larger portion of the market.

Emerging wineries like Bartholomew can prosper and enhance the Washington wine brand in their mission to achieve the Washington Wine Association’s goal of having “a bottle of wine on every table”.

Fawbush is in favor of the positive communication approach, as long as it is supplemented by robust efforts to promote Washington wines.

His winery is compact, flexible and free of debt. It’s success, he says, is due in part to its innovation and willingness to experiment. His unique variety includes cultivars like, Carmenere, Tannat and Primitivo. These unconventional offerings in Washington, draw clientele to his tasting room.

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Wine supports 61,300 jobs, $4.1 billion in wages and generated $771 million in taxes, including $277 million for state and local governments.

Kristina Kelley, the new executive director of the Washington Wine Commission, understands the challenges but notes they’re not unique.

“I think the problems we have here in Washington are no different than any other wine region,” she said.

Negative headlines don’t help, she said.

“It is not, ‘Woe is Washington,” she said, referring to a headline in the Oct. 31, 2023 edition of Wine Spectator magazine that accompanied a column about the Ste. Michelle cutbacks.

Kelley anticipate several flat years for Washington wine, but is committed to promoting the state’s diverse wines. The bottle-on-every-table mission suits Washington’s diverse wines, grapes, styles and price ranges.

“There is an opportunity to be part of every occasion,” she said. “There is no need to go outside of Washington.”

She acknowledged there will be pain ahead as the industry adjusts, as seen with the Ste. Michelle contract cuts. Schulz, of Incredible Bulk, referred to it as “a state of imbalance.”

As per the influential 2024 State of the U.S. Wine Industry Report, there exists an oversupply of vineyards nationwide. The report is the work of Rob McMillan, the executive vice president and founder of Silicon Valley Bank, a branch of First Citizens Bank.

The study points out a negative demand shift for wines priced less than $12, whereas, high-priced wine sales volumes have stayed positive.

According to McMillan’s predictions, premium wineries will thrive in 2024, but the prospects for high production wineries seem less promising.

The report presents two possible solutions to the declining demand in the wine market.

“We either work together to formulate a compelling narrative that encourages positive consumer behavior, or we utilize whatever tools at our disposal to maximize productivity in production, viticulture and promotion.”

Kelley, who represents the Washington Wine Commission, favors both approaches.

This region is home to a tightly woven wine community that is recognized for its supportive mentality. They are also keen to broaden their reach to engage more customers.

“I am decidedly hopeful,” she expressed.

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About the Author: Chris Lehoux

Meet Chris Lehoux, an experienced wine connoisseur and dedicated blogger with a deep passion for all things wine-related. With years of expertise in the industry, Chris shares insightful wine reviews, valuable wine tasting tips, expert pairing advice, and captivating tales of vineyard visits. Join Chris on a journey through the world of wine, where every sip is an adventure waiting to be savored!